What is the impact of pensions on saving?
The enormous growth in both Social Security and private pension plans has stimulated much interest in the impact of these retirement programs on individual saving behavior and the level of national saving. The first issue is the extent to which employees covered by pension plans reduce their own direct saving in response to expected retirement benefits; the response of individuals to guaranteed retirement income will determine, to a large extent, their well-being in retirement. For a nation concerned about saving and capital formation, the second issue is the impact of collectivized retirement saving plans on the national saving rate. This impact will depend not only on individual responses to promised pension benefits, but also on the extent to which firms undertake direct saving, and, if they do not, the extent to which shareholders recognize and compensate for unfunded pension liabilities. The effect of pensions on national saving also requires determining the degree to which increased saving induced by favorable tax provisions exceeds the loss of government revenues. ; This paper will lay out the questions that need to be answered in order to determine the impact of private pension plans on saving, highlight those aspects of pensions that may complicate the analysis, summarize the results of empirical research in this area, and finally make recommendations for improvements in the data.
|Date of creation:||1991|
|Publication status:||Published in Pensions and the Economy: Sources, Uses, and Limitations of Data, University of Pennsylvania Press for the Pension Research Council (1992).|
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- Pitelis, Christos N., 1984.
"The effects of Life Assurance and Pension Funds on Other Savings : The Postwar U.K. Experience,"
The Warwick Economics Research Paper Series (TWERPS)
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NBER Working Papers
1602, National Bureau of Economic Research, Inc.
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- Kotlikoff, Laurence J, 1979. "Testing the Theory of Social Security and Life Cycle Accumulation," American Economic Review, American Economic Association, vol. 69(3), pages 396-410, June.
- Philip Cagan, 1965. "The Effect of Pension Plans on Aggregate Saving: Evidence from a Sample Survey," NBER Books, National Bureau of Economic Research, Inc, number caga65-2, September.
- Feldstein, Martin & Seligman, Stephanie, 1981.
"Pension Funding, Share Prices, and National Savings,"
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American Finance Association, vol. 36(4), pages 801-824, September.
- Martin Feldstein & Stephanie Seligman, 1980. "Pension Funding, Share Prices, and National Saving," NBER Working Papers 0509, National Bureau of Economic Research, Inc.
- Boskin, Michael J, 1978. "Taxation, Saving, and the Rate of Interest," Journal of Political Economy, University of Chicago Press, vol. 86(2), pages 3-27, April.
- Michael J. Boskin, 1978. "Taxation, Saving, and the Rate of Interest," NBER Chapters, in: Research in Taxation, pages 3-27 National Bureau of Economic Research, Inc.
- Alan S. Blinder, 1982. "Private Pensions and Public Pensions: Theory and Fact," NBER Working Papers 0902, National Bureau of Economic Research, Inc.
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